LPEA blames suppliers’ decisions as green incentives go brown

Incentives to use electricity during off-peak hours would be minimized under La Plata Electric Association’s proposed rate structure, a change that dismayed dozens who attended Thursday night’s informational meeting at the cooperative.

Dozens gathered in the conference room of LPEA’s office in Bodo Industrial Park for the last of three discussions about the upcoming rate increase. LPEA says it is needed to pay for the rising cost of electricity it purchases from Tri-State Generation and Transmission, LPEA’s wholesale supplier.

The most bitter discussions surrounded how the new rate largely abolishes customers’ financial incentives to use electricity when demands on the grid generally are low, a move that undermines many customers’ attempts to adopt more environment-friendly technologies through the electric thermal storage program. In fact, the new rate structure punishes customers who use less energy by charging them higher rates than those who consume lots.

LPEA CEO Greg Munro generally concurred with such analysis. He said he was sorry LPEA, which had been a leader in environmental practices and efficiency, had not prevailed during the Tri-State board of directors’ recent votes setting its supplier’s rates.

Under the old rate structure, if you used electricity between 11 p.m. and 7 a.m., you paid an off-peak rate of $0.046 per kilowatt hour versus the peak rate of $0.151.

Going forward, the off-peak window is much narrower – from 1 to 5 p.m. – and you’ll pay $0.073 then versus $0.144 during peak hours. On Sundays and major holidays, LPEA will charge $0.050 from 11 p.m. to 7 a.m., causing Munro to wryly say, “It’s a good thing we have more major holidays than we used to.”

One man said, “I think it’s catastrophic customer policy to make these major changes all at one time.”

When Munro cried unhappy necessity, pointing to Tri-State price hikes, another man said, “But there’s a difference between what Tri-State charges you and how you charge your customers to reflect that. Clearly, the big huge loser here is anyone who was a (time-of-use ratepayer),” he said.

Though dialogue between Munro and audience members was unfailingly polite, criticisms of LPEA’s new rate structure as both socially and environmentally regressive grew more numerous, heartfelt, indignant and detailed as the night wore on.

Under Tri-State’s new rate structure, payments to Tri-State will amount to an unprecedented 70 percent of LPEA’s bill.

“Tri-State’s total rate increase to LPEA is 12.1 per cent,” Munro said.

Higher fuel costs, Munro said, were largely to blame for Tri-State’s increased prices. Last month, Munro said LPEA sent a letter to Rural Utility Services to request that it review Tri-State’s new rate structure for fairness, as had other cooperatives in Colorado, while three other co-ops in New Mexico have filed protests alleging Tri-State’s new rate structure is discriminatory.

“There’s going to be a fight, and we don’t know what the letter’s going to do,” Munro said.

The new rate structure LPEA is adopting in light of Tri-State’s rate increase is dismayingly complicated. On average, rates will increase about 11 percent, with the normal residential rate increasing by 12.9 percent.

But the devil is in the details, and depending on how LPEA classifies a consumer, the new rate structure might cause a lot more pain.

When Munro revealed LPEA would increase irrigators’ rates by 16 percent but raise rates for large businesses by only 5 percent, several members of the audience loudly groaned while one woman whispered, “my God.”

Munro said LPEA had fought to keep its discount for customers who used an Electric Thermal Storage Heating Product, and LPEA’s board had asked staff to put together an alternative-energy plan.

LPEA board member David Montoya said Tri-State’s new rate structure would guarantee the return of peaks and valleys in grid use.

“We think Tri-State is making a big mistake because the rate structure it’s adopted rewards inefficient co-ops,” Montoya said. “As I see it, the fight’s not over.”